Panasonic logs $9.3 billion annual loss

PHOTO: Panasonic logs $9.3 billion annual loss

TOKYO - Panasonic said Friday it had logged another eye-watering net loss in the year to March, coming up US$7.5 billion (S$9.28 billion) short, but pledging to turn a profit over the next 12 months.

The struggling electronics giant booked a 754.25 billion yen (S$9.28 billion) net loss over the year to March, only slightly better than the 772.17 billion yen hole in its balance sheet the previous year, one of the worst-ever losses for a non-financial Japanese firm.

Its operating profit however jumped 268 per cent to 160.94 billion yen as the firm carried out aggressive cost cutting and reform programmes, while sales came to 7.3 trillion yen, down 6.9 per cent.

The company said the electronics industry as a whole "continued to be in a severe business situation including sluggish demand in flat-panel TVs mainly in Japan".

Panasonic, like key domestic rivals Sony and Sharp, has long suffered in its television business where foreign rivals have proved tough competition, while its debt has been inflated by the purchase of smaller rival Sanyo.

The company also booked some 508 billion yen as a business restructuring expense.

The firm said the yen's rapid fall against the dollar and the euro toward the end of last year had mitigated its problems somewhat. The Japanese unit was trading well above 100 to the dollar Friday, against a rate below 80 in the middle of last year.

Exporters generally get a bounce from a weakening currency because their products become more competitive overseas and their repatriated profits are worth more at home.

Ahead of the results announcement, the company's Tokyo-listed shares closed 3.74 per cent up at 749 yen.

For the year to March 2014, Panasonic resolved to return to net profit of 50 billion yen and increase operating profit to 250 billion yen.

But it expected annual sales to fall 1.4 per cent to 7.2 trillion yen.

On Thursday, rival Sony said it had booked its first annual net profit in five years, offering a glimmer of hope for the former market leader.

But the once-iconic firm's jump back into the black was largely due to fluctuations in the value of the yen and gains from a string of asset sales - including unloading its Manhattan office building for more than $1.0 billion - while its television and electronics business continues to struggle.

The maker of PlayStation gaming consoles and Bravia televisions has launched a massive corporate overhaul to stem losses, including thousands of job cuts and the asset sales.

Panasonic and Sharp have also begun huge restructuring plans to rescue their bleeding balance sheets.

Century-old Sharp warned last year that its survival was at stake. The cash-strapped company put up its Osaka headquarters as collateral for life-saving bank loans.

Sharp, which reports its full-year earnings next week, has since said its wide-ranging restructuring would keep it from going under, but it still expects to lose 450 billion yen in the fiscal year to March.

However, investors like the cut of its cost-saving jib and cheered a report Friday that it would be chopping an extra 5,000 jobs - mainly abroad - on top of the thousands it has already axed.

The issue climbed 6.38 per cent to 450 yen on Friday.